YELP INC

Company Overview

Since Yelp’s founding over 20 years ago, our mission has remained the same — to connect consumers with great local businesses. Over that time, we have built one of the best known Internet brands in the United States. Consumers trust us for the more than 300 million ratings and reviews available on our platform of businesses across a broad range of categories. This consumer trust is the foundation of our business, from which we are able to empower other businesses to succeed. Our advertising products help businesses of all sizes reach a large audience, advertise their products and drive conversion of their services, while our subscription services support businesses operationally.

Our performance in 2025 — which included record annual revenue and profitable growth — demonstrates the profitability of our broad-based local advertising platform. For a discussion of our results for the year ended December 31, 2025, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included under Part II, Item 7 of this Annual Report.

Our Long-Term Growth Opportunity is Large

We believe our ability to provide value to both consumers and businesses positions us well in the large and growing local, digital advertising market in the United States. The competitive advantages we have established over two decades, together with our product-led business model and disciplined expense management, provide us with the opportunity for long-term profitable growth in this market. We have:

•A proven engine to foster and recommend trusted, human-generated content. Our platform provides the type of reliable and useful review content that helps consumers make informed spending decisions and confidently transact with local businesses. This collection of high-quality, human-generated content is also the type of proprietary data that is essential to AI search providers, thereby providing a valuable monetizable asset. The breadth and depth of our content is the result of our significant investments in both developing communities of users as well as providing a great consumer experience that enables and encourages consumers to share their everyday business experiences through reviews, photos, videos and other content. To maintain the quality and integrity of our content, we have also developed industry-leading content moderation practices that incorporate both advanced technology and human moderation.

•A strong brand and a large consumer audience. Our trusted content attracts a large, high-intent consumer audience, keeping our traffic acquisition costs low. This large audience reflects the strength of our brand as a leading resource for consumers to search for and discover great local businesses across categories as well as our availability across a wide range of platforms and devices. It also provides a compelling value proposition to advertisers. In addition to its size, we believe our audience has high purchase intent and is generally affluent.

•A broad-based local advertising platform and sophisticated advertising technology. Our large consumer audience supports a broad-based advertising model with products designed to meet the needs of businesses of all sizes. Our portfolio of products and attribution capabilities leverage first-party data to provide advertising solutions across categories and each stage of the consumer funnel, both on and off platform. These products are backed by a scaled and extensible advertising technology platform. To establish the price of an individual ad click, we run an auction for each advertising placement. The bidding algorithms used in our auction system are designed to prioritize spending advertiser budgets efficiently and maximize ad clicks to optimize the value we deliver to advertisers, while our proprietary ad delivery technology is designed to determine the most relevant ads for consumers to drive fulfillment.

•Product innovation powered by emerging technologies. Our focus on developer productivity and expertise in AI technologies have allowed us to sustain a high velocity of product innovation. We have invested in systems, processes and tools to drive reductions in median lead time per developer, resulting in more than 200 new features and updates over the past five years. In addition, we have developed expertise in AI technologies through our use of natural language processing, large language models (“LLMs”) and neural network models across our business, from search results and review recommendations to ad delivery to content moderation. This expertise has positioned us to use AI to enhance the consumer experience and deliver greater value to businesses.

Our Growth and Margin Strategy

We believe that the investments we made in our strategic initiatives have led our business to new highs in recent years, and see further opportunities to build upon this success and deliver even greater value to both consumers and advertisers over the long term. As a result, in 2026, we plan to invest in the areas set forth below, each of which we believe represents its own long-term opportunity and which together we believe will position us to drive long-term growth.

Initiatives to Drive Durable Long-term Growth

•Reconceive Yelp around actions and answers. We believe that, by combining our trusted, human-generated content with AI technologies, we can deliver a conversational user experience focused on providing answers and taking actions that reconceives how consumers and businesses connect on Yelp. Our 2026 roadmap aims to provide consumers with innovative, AI-powered products and features that take them seamlessly from discovery to action, including a comprehensive version of our AI chatbot, Yelp Assistant, that works across categories and entry points.

•Deliver AI tools that help businesses grow, operate and succeed. We plan to build on our efforts to deliver value to businesses, whether or not they are advertisers on Yelp, by focusing on delivering AI-powered tools that support businesses operationally, particularly in Services categories. We plan to offer a new generation of AI tools that go beyond advertising to help businesses capture demand, manage leads, support their customers and operate with increased efficiency. We aim to build or acquire technology to manage the full customer lifecycle — from lead generation to lead management and beyond — beginning with our acquisition of Hatchify Inc. (“Hatch”), a leading AI-powered lead management platform focused on Services businesses. This initiative also provides an opportunity to further diversify our business with new revenue streams; subscription tools create value beyond advertising, building an even more diverse and resilient business while strengthening our relationships with businesses.

•Extend our reach to power local discovery across the AI ecosystem. As local discovery moves beyond traditional search into new devices, apps and AI-powered interfaces, we are well positioned to be an essential partner wherever consumers are making local decisions. We plan to pursue additional data licensing agreements and enhance our AI application programming interface (“API”) to extend access to our trusted content to provide consumers with reliable local answers and the ability to take actions seamlessly, even as AI changes the local search landscape.

Investing for Growth

We plan to continue our disciplined expense management as we invest in high-return areas to drive profitable growth. Excluding the recently acquired Hatch team and hires to support their growth, we expect headcount to again remain approximately flat year over year in 2026, reflecting both our commitment to driving leverage in the business through our product-led strategy as well as our teams’ abilities to deliver operational efficiencies using AI. We also continue to expect to reduce stock-based compensation expense to less than 6% of revenue by the end of 2027. To support our ongoing repurchase plans, in February 2026, the Board authorized us to repurchase an additional $500.0 million of shares of our outstanding common stock.

Prudent Capital Allocation

As we look to capitalize on the opportunities ahead, we expect our approach to capital allocation to be driven by opportunities to invest in additional strategic transactions and increase spend on paid traffic acquisition, while continuing our stock repurchase program, subject to market and economic conditions.

Our Products and Services

Advertising

We offer a range of free and paid advertising products to businesses of all sizes, including the products listed below, which provide the ability to deliver targeted advertising to our large and high-intent audience. As in past years, advertising accounted for the vast majority of our revenue during the year ended December 31, 2025, contributing 95% of our revenue. We recognize revenue from our business listing and advertising products, including advertising sold by partners, as advertising revenue.

Other

We generate other revenue through subscription services, licensing payments for access to Yelp data, transactions and other non-advertising arrangements.

Sales

We sell our advertising products directly through our sales force as well as online through our website and our Yelp for Business app, and indirectly through partners.

Sales Teams

Self-serve Sales. Our Self-serve platform allows businesses to purchase and manage their advertising products directly from our website or the Yelp for Business app. Businesses can purchase Yelp Ads and business page upgrades directly through our Self-serve platform. The convenience of our Self-serve platform has helped us reduce our reliance on sales and customer support headcount.

Sales Partnerships. We also generate revenue through the resale of our advertising products by certain agencies and partners, such as Thryv, as well as monetization of remnant advertising inventory through third-party ad networks. Our Yelp Advertising Partner Program allows partner agencies to independently sell and manage ad campaigns on behalf of their small and medium-sized business (“SMB”) clients, providing increased centralization and flexibility. The products covered by these arrangements include Yelp Ads as well as all of our business profile products.

Technology

We rely on a set of core technologies that enable us to be a trusted local resource for consumers and a partner in success to businesses of all sizes. We provide scalable services across platforms and devices using a combination of proprietary, open source and third-party technology solutions and products:

•Anticipating Consumer Needs. We analyze the large volumes of data collected from our platform and apply our proprietary indexing and ranking techniques to provide our users with contextual, relevant and up-to-date information. We apply machine learning algorithms to predict user needs and preferences based on factors such as the user’s recent activity, location, time of day and season, then tailor the user’s experience on Yelp accordingly. In our Services categories, for example, if a user recently searched for movers, we might suggest searches for businesses offering self-storage or junk removal. Similarly, if our data suggests that a user is a homeowner, we might promote collections of businesses that offer spring cleaning or other seasonally appropriate services.

•Recommendation Software. Our recommendation software refers to the proprietary automated trust and safety software systems that we have developed to analyze the relevance, reliability and utility of each review submitted to our platform. “Recommended” reviews — those that the software deems to be the most useful and reliable — appear directly on Yelp business pages, while less trustworthy and unreliable content appear on secondary pages and do not factor into a business’s overall star rating. Our recommendation software analyzes all reviews, reviewers and businesses, using hundreds of signals and billions of data points, and applies the same objective standards to each review, regardless of whether the business being reviewed advertises on Yelp. These signals include those related to the reviewer’s type and level of activity with Yelp (which might correspond to the reviewer’s reliability or suggest reviewer biases) and whether certain reviews originate from related Internet Protocol (“IP”) addresses (which might mean the reviews were submitted by the same person). The software regularly evaluates each review and, as a result, its analysis can change over time as new data becomes available; reviews that were previously recommended may become not recommended, and reviews that were previously not recommended may be restored to recommended status.

•AI, Machine Learning and LLMs. We use AI, including machine learning, to power and enhance features across our platform. Deep learning neural networks model user behavior to select the most relevant ads to display and predict which photo shown in an ad will generate the most clicks. We use LLMs to better understand user intent in search queries and enhance our search capabilities, including by determining the most relevant information from reviews to display in the business highlights that appear in search results. LLMs also play an important role in analyzing user-generated content to protect consumers and business owners from malicious or harmful content. Neural network-based systems also support our content moderation efforts by proactively removing video content that may be inappropriate. AI technology also powers our recently introduced call answering services, Yelp Host and Yelp Receptionist, as well as Hatch’s lead management platform.

While AI can be a powerful tool, we recognize that it has limitations and so approach our use of it thoughtfully. For example, to mitigate potential concerns regarding the accuracy of our AI-powered summaries, we populate the summaries with quotes from actual reviews. Similarly, although we believe incorporating AI features into our platform provides benefits for consumers and businesses, we also understand that the use of AI is not desirable in all contexts. For example, to address the risk that AI tools are abused to create untrustworthy reviews, we have invested significantly in methods to better detect and mitigate AI-created reviews on our platform, which our policies prohibit, including detection technologies powered by AI.

•Mobile Solutions. With our most engaged users on our mobile app, we have invested significant resources into developing a comprehensive mobile platform for consumers that supports both major smartphone operating systems available today, iOS and Android. Similarly, we designed our Yelp for Business app to make it easier for businesses to engage with their customers and manage their presence on Yelp. Currently available for iOS and Android, this app provides businesses with daily metrics reports, page view analytics and leads data, as well as the ability to manage quote requests and opportunities in Nearby Jobs. Businesses can also purchase, customize and manage Yelp Ads through the Yelp for Business app.

•Ad Delivery. We use proprietary ad targeting and delivery technologies that are designed to quickly target and display hyper-relevant advertisements to users of our platform. When a consumer enters a search on our app, these technologies determine the most relevant ads to show and serve those ads alongside the organic search results, typically in less than half a second. Our targeting software leverages neural networks that evaluate thousands of signals about the user, business and search context to make sure consumers see the right ad at the right time and drive ad clicks.

•Auction System. We use an auction system to determine the price we charge advertisers for ad clicks. Our auction system uses advanced algorithms to bid on ad placements on behalf of advertisers, taking into account their budgets, current and predicted levels of relevant consumer traffic, changes in user behavior and competition from other advertisers, among other things. These bidding algorithms are also designed to prioritize spending advertiser budgets efficiently and maximize ad clicks, with the goal of delivering as much value to advertisers as possible. For example, if our models predict that relevant consumer traffic will meaningfully decrease for a period of time during an ad campaign, our bidding algorithms will dynamically allocate advertiser budget around that period to avoid spending a disproportionate amount of the budget while supply is constrained.

•Infrastructure. The vast majority of our platform is currently hosted by Amazon Web Services (“AWS”) from multiple locations, which allows us to scale our infrastructure dynamically according to demand as well as optimize the cost and performance of our infrastructure. Our platform is designed to have high availability, from the Internet connectivity providers we choose, to the servers, databases and networking hardware that we deploy. We design our systems such that the failure of any individual component is not expected to affect the overall availability of our platform. We also leverage other third-party cloud-based services such as content delivery networks, rich-content storage, map-related services, ad serving and bulk processing.

•Network Security. Computer viruses, malware, phishing attacks, denial-of-service and other attacks, and similar disruptions have become more prevalent in our industry, have occurred on our systems in the past and we expect them to occur periodically on our systems in the future. For information about our cybersecurity risk management, strategy and governance practices, see the section titled “Cybersecurity” included under Part I, Item 1C of this Annual Report.

Maintaining the Integrity of Our Content

Providing access to useful and reliable information to help inform consumers’ spending decisions is critical to our mission of connecting people with great local businesses. With misinformation and deceptive behavior common across the Internet, we have prioritized combating this sort of conduct since our earliest days to maintain user trust and level the playing field for hard-working businesses that earn their great reputations honestly. Our industry-leading trust and safety measures include investments in both advanced technology and human moderation:

Recommendation Software. Our automated recommendation software is our first line of defense against unreliable content and misinformation submitted to our platform. As described in more detail under “—Technology” above, our recommendation software analyzes billions of data points and hundreds of signals from all reviews, businesses and reviewers in an effort to recommend the most useful and reliable reviews. To avoid conflicts of interest, no individual Yelp employee, business owner or reviewer can influence or override the software’s decisions for any individual business. Our recommendation software helps us mitigate misinformation at scale by detecting and de-emphasizing less trustworthy reviews, including content that may be:

•Biased: including reviews written by those with ties to a business, such as competitors, disgruntled employees, friends or family.

•Solicited: when someone associated with a business requested the review, which can create a positive bias that is unfair to other businesses. When asked to write a review by a business, customers may feel pressured to give the business a higher star rating than someone who was inspired to write a review on their own. Businesses also tend to ask for reviews from customers they know will give them a great rating.

•Less reliable: including reviews written by less active users, whom we don’t know enough about to recommend their opinion to our community, and reviews connected to suspicious behavior, such as when a disproportionate number of reviews for a business are submitted from the same IP address.

•Less useful: including unhelpful rants and raves as well as irrelevant information.

As of December 31, 2025, approximately 76% of the reviews submitted to our platform were recommended by our automated software and approximately 15% were not recommended but still accessible on secondary pages. Although they do not factor into a business’s overall star rating, we provide access to reviews that are not recommended to provide transparency regarding reviewed businesses and reviewers as well as the efficacy of our recommendation software.

Community. Yelp has always been a community-driven review platform, and we encourage authentic content from the start of the user experience. We encourage users to complete a public profile, which not only helps build a community but also helps signal the reliability of their content. We also established the Yelp Elite Squad to provide recognition to users who are active in the Yelp community and consistently contribute high-quality content, as discussed further under “—Consumer Engagement” below.

In addition to encouraging reliable content and fair play from the outset, our communities serve as additional layers of oversight. For example, we provide easy ways for our communities of users and business owners to report content that they believe violates our guidelines and suggest updates to business information. We also provide multiple ways for business owners to respond to reviews.

Human Content Moderation. Our User Operations team maintains the reliability and integrity of content on Yelp by protecting data quality, investigating potential fraud and moderating content. In addition to investigating individual reports of content that violates our policies, our User Operations team conducts and facilitates larger investigations into attempts to deceive consumers. For example, we proactively work to identify businesses and individuals who offer or receive cash, discounts or other benefits in exchange for reviews, such as reputation management companies that offer to artificially inflate search rankings and online reputations. Our human-powered moderation is also able to identify and thwart nuanced attempts to mislead consumers that other platforms may miss. For example, User Operations thoroughly verifies new business page submissions to prevent fake, duplicate or multiple listings intended to deceive customers, generate leads or gain unfair advantages. In 2025, business page rejections increased 29% from 2024, driven by improved moderation processes that more effectively identify and reject suspicious submissions in high-risk emergency services business categories, such as locksmiths, garage door repairs, roadside assistance and plumbing, where vulnerable consumers in need of assistance may be especially susceptible to scams.

In addition to taking direct corrective action — such as recategorizing businesses to appropriately reflect their services, closing user accounts or rejecting new business page submissions, as in the example above — if we identify or confirm any attempts to mislead consumers or similar issues through our investigations, we typically pursue one or more of the courses of action described below (each of which we may also employ on a stand-alone basis).

Consumer Alerts Program. Our consumer alerts program warns consumers when we find evidence of extreme attempts to manipulate a business’s ratings and reviews or other egregious conduct that may harm consumers and unfairly put other businesses at a disadvantage. When we issue a consumer alert, a warning message appears above the review section of the business’s Yelp page with information about the reason for the alert and, where available, a link to the evidence we collected in support of the alert.

We issue the following types of consumer alerts:

•Unusual activity alerts indicate that a business, after gaining public attention, has received an influx of reviews that do not reflect genuine firsthand experiences. Our User Operations team may temporarily disable the posting of content to the business page as they investigate and remove content that violates our policies.

•Public attention alerts inform consumers when a business receives an influx of reviews related to it gaining public attention for either being accused of, or the target of, discriminatory behavior.

•Suspicious review activity alerts warn consumers when we have uncovered a large number of positive reviews submitted from the same IP address, which can indicate a concerted effort to inflate the business’s overall star rating on Yelp. We also issue this type of alert when we discover reviews from users who may be connected to a group that coordinates the buying or selling of online reviews (often referred to as a review exchange ring).

•Compensated activity alerts indicate that we caught someone offering payment in the form of cash, discounts, gift certificates or other incentives in exchange for writing, changing, preventing or removing reviews.

•Questionable legal threat alerts warn consumers that the business may be misusing the legal system to intimidate or silence a reviewer by making dubious legal threats or using a contractual gag clause.

When applicable, Yelp business pages include a consumer alerts history section, which includes a list of the business’s previous compensated activity alerts, suspicious review activity alerts and questionable legal threats alerts, to warn users of abnormal review activity or attempts to mislead, supplementing our public index of alert recipients.

Removal of Reviews and Other Content. We regularly remove reviews, photos and other content from our platform that we believe violate our terms of service, including, without limitation: reviews that do not reflect a first-hand consumer experience; content that has been bought, sold or traded; AI-created reviews; and reviews that are posted by someone we believe to be affiliated with the reviewed business. We also take steps to ensure that Yelp is a safe and welcoming place for everyone by removing threatening, harassing or lewd content, as well as hate speech and other displays of bigotry. Consumers can access information about reviews that we have removed for a particular business by clicking on a link on the business’s Yelp page. As of December 31, 2025, approximately 9% of the reviews submitted to our platform had been removed.

Coordination with Law Enforcement. We regularly cooperate with law enforcement and consumer protection agencies to investigate and identify businesses and individuals who may be engaged in false advertising or other deceptive practices relating to reviews. We regularly provide the Federal Trade Commission and other regulators with leads on deceptive reviews and conduct. We also publish an index that lists the latest compensated activity and suspicious review activity alerts we have placed on Yelp business pages, making it easier for regulators to identify businesses that may have participated in suspicious or deceptive review activity.

Legal Action. Our terms of service prohibit the buying and selling of reviews, writing fake reviews, review gating and other review suppression tactics that disproportionately promote positive reviews, while diverting criticisms to private channels. We regularly issue demands to third parties engaging in these and other deceptive activities that they cease such activities in relation to our platform. For example, we routinely investigate reputation management companies that offer these services and, if warranted, we take action against them, including by pursuing legal action to disrupt these harmful markets.